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Skagen Says Ignore Wall Street, Bet on Emerging Markets

“Emerging markets fundamentals are actually stronger now than they were in the past, and they are certainly stronger than developed-market countries, especially if you factor in the policy room for maneuver,” he said in an e-mailed reply to questions. “In addition to that, I would argue that valuation and technicals matter just as much as fundamentals at this juncture.”

Stensrud sees emerging economies breaking away from dependency on these cycles as they rely more on service based industries.

“Looking at traditional emerging markets you could be tempted to think that they used to be commodities driven, that they used to be cyclical, but their service sector is growing very fast,” he said. “You could say South Africa is a mining country, but if you look at South Africa’s stock exchange, it’s basically a services index. The service sector is growing fast in all emerging economies.”

Stensrud said they’re also pursuing investments in South Africa and in Chinese Internet companies.

“Two years ahead, we think we are in a huge paradigm shift globally to what you might call a non-material economy,” he said. That means “less and less goods and energy produce services, so we are looking a good deal into global e-commerce.”

How's that folks ! 

South African Bonds Gain in Best Week Since September on Inflows

 

“The view that developed markets are the only places to be may start being tested,” Vivienne Taberer, who helps manage the equivalent of more than $14 billion in fixed-income assets at Investec Plc, said by phone from Cape Town today. “Things are not that bad for emerging markets and not so good for developed markets.”

Lower currency volatility would increase carry returns on South African investments, luring investors to the rand, David Bloom, global head of currency strategy at HSBC Holdings Plc, said in an interview in Cape Town yesterday. Carry trade refers to the rate of interest earned from securities less the cost of funds borrowed to purchase them.

Zambian mines set to double power use

 February 11 2014 at 08:00am
By Bloomberg

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Felix Njini Windhoek


Demand for power from new and existing mines in Zambia, Africa’s biggest copper producer, will almost double over the next five years, according to Copperbelt Energy.

Demand from the country’s Copperbelt and Northwestern provinces would increase to 1 550 megawatts by 2019 from 900MW now, Copperbelt Energy corporate development managing director Michael Tarney said on Friday.

Copperbelt Energy, based in Lusaka, is the largest supplier of electricity to mining companies in Zambia, where the local units of companies such as First Quantum Minerals and Glencore Xstrata have expansion projects under way.

The country would commission power projects this year that would boost generation capacity by 39 percent, or 780MW, Mines Minister Christopher Yaluma said last week.

“Demand is being driven by new investments in copper mining and smelting,” Tarney said. “They are all expanding… and this means we have to find more power.”

Demand in the Copperbelt province was projected to rise to 850MW in the next five years from about 650MW now, while it might almost triple to 700MW from 250MW in the Northwestern province as new mining projects began, he said.

First Quantum Minerals’ $1.7 billion (R18.8bn) Sentinel copper project, which will be commissioned in the second half of the year, would require about 400MW once it was fully operational, Tarney said.

The project would help raise Zambia’s copper output to more than 1 million tons next year from 760 000 tons last year, Yaluma said. – Bloomberg